Headlines

Reuters

After more than 50 years of Castro, Cubans to begin paying taxes

The government’s free market reforms introduced over the last two years, are designed to encourage small businesses, private farming and individual initiative, along with plans to pay state workers more. Under the new tax code the state hopes to get its share of the proceeds.

The government also envisions replacing subsidies for all with targeted welfare, meaning that the largely tax-free life under a paternalistic government is on its way out.

“This radically changes the state’s relationship with the population and taxes become an irritating issue,” said Domingo Amuchastegui, a former Cuban intelligence analyst who lives in Miami and writes often about Cuba.

The new code covers 19 taxes, including such things as inheritance, environment, sales, transportation and farm land, various license fees and three contributions, including social security.

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The headline is kinda deceptive. If you read the story you find out businesses had been paying 100% taxes all along. Yes, that’s right… 100%.

Under the old system, large and small state-run companies, which accounted for more than 90 percent of economic activity, simply handed over all their revenues to the government, which then allocated resources to them.

notropis, the media has been touting raul castro as an “admirer” of the chinese model for years yet he hasn’t implemented it to date. The reason is that Cuba is not China. Culturally, politically it’s very different. The regime wouldn’t last 6 months under the Chinese model and castro knows it. So while they tinker with “reforms” that the media touts as “market oriented” they won’t do more than dabble. Don’t expect to see any major reworking of the economic system as China did under Deng Xioping